The Effect of Board Gender Diversity on Firm Financial Performance: Empirical Evidence from Vietnam

Abstract

This study examines how board gender diversity affects corporate financial performance and further explores this relationship during COVID-19. Using a sample of 528 non-financial companies listed in Vietnam for the period from 2017 to 2021, this research found that women's participation in the board of directors is mostly not significantly associated with accounting-based performance, measured by ROA and ROE. However, there is a positive relationship between female board members and market-based performance, proxied by Tobin’s Q. When there is the presence of at least three female directors, this association is pronounced, consistent with critical mass theory. Furthermore, it suggested that there is no significant difference in the association of gender diversity and company performance between the COVID-19 period and the pre-COVID-19 period, except for a few cases. Especially, this study is the first in Vietnam to use quantile regression, thus showing substantial variation in the effect across firm performance levels and over different periods (COVID-19 and pre-COVID-19).